By John Kitzhaber, Governor of Oregon and Chairman Governors’ Wind Energy Coalition

It is an honor to be here with energy and business innovators and leaders who understand what it takes to build a clean economy: creativity; smart business thinking; and partnerships that cross borders – both geographic and political.

Energy and climate are THE challenges of our time – both globally and here in the Pacific Northwest – and no set of challenges will have a greater impact on our nation’s economy, environment and quality of life in coming decades. Indeed, no other issues have bigger implications for the planet and coming generations.

The central question is whether we will shape our energy future through intentional policy, investment and development, or whether it will shape us.

Answering this question is urgent, because the toll of our fossil fuel dependence is rising fast. We are struggling to make the complicated transition from 20th century energy infrastructure to new business models that can unleash the job-creation potential of low-carbon energy innovation.

We see the difficulties every day…

· In the high cost of maintaining outdated energy and transportation infrastructure;

· In trade wars aimed at locking up market share for next-generation energy products; and

· In heated policy debate about leveling the playing field for clean energy.

A national energy strategy is long overdue. We can no longer afford to pursue policy in fits and starts and send contradictory signals to the market. We have had a bad case of attention deficit disorder when it comes to renewable energy and energy efficiency, never quite committing to the

￼clarity and consistency necessary to give entrepreneurs and investors the certainty and support they need to innovate.

Even as we celebrate the continuation of the federal renewable electricity production tax credit, we can’t help but be frustrated by the monumental effort required to secure short-term gains. Where is the vision, the leadership and the partnership at the local, regional and national level to do what’s need to upgrade the grid, invest in new transmission, streamline our regulatory processes, and design new finance mechanisms to accelerate the clean economy?

Well, let me tell you a little about how we do things here in the Pacific Northwest.

As you well know, Oregon has undergone a clean energy revolution over the past decade, a revolution in which wind energy has been at the forefront, and I believe we are leading the way to a new clean energy economy.

We’ve been working for years to de-carbonize our economy, reducing our dependence on foreign oil and polluting coal while developing home-grown expertise that creates local jobs, boosts our economy, and reduces greenhouse gas emissions.

It’s no accident that Oregon is reaping job creation and community development rewards throughout the state. Many of you in this room have been instrumental in passing the landmark policies and deploying the billions in investment in solar, wind, geothermal, biomass and wave development, that have made Oregon a national leader.

Policies that help level the playing field and provide access to market for emerging technologies have been critically important – policies like Oregon’s Renewable Portfolio Standard, Renewable Fuels Standard, Low Carbon Fuels Standard and incentives like Oregon’s Energy Incentive Program and Residential Energy Tax Credit.

The result? According to the Pew Charitable Trusts, Oregon now has the most jobs per capita in the clean energy economy of any state in the countryx1. And clean energy job growth is five times stronger than overall

￼job growth.

Oregon added 640 new MW of wind energy last year alone, and we are now the 5th highest producing wind state in the country. We are home to the largest wind farm in the United States, producing 845 MW of energy.

Over $5 billion in investment has created thousands of construction jobs, and several thousand permanent jobs across all clean energy sectors.

Portland is now home to the North American headquarters for Iberdrola, Vestas, and Element Power, collectively employing 800 people.

In rural Oregon, the wind energy industry has helped to expand and improve the county tax base. Sherman County receives more than $11 million from wind energy development annually; this is money that is invested in local services like fire protection, public schools and roads. That’s critical at a time that rural communities are not sharing in the benefits of the economic recovery.

We’re also seeing the benefits of a locally-grown clean energy supply chain. Consider the story of Miles Fiberglass in Clackamas, a family-owned company that has transformed itself after its core business of making composite parts for RV’s was hit hard by the recession. Miles has grown from 50 to as many as 100 employees seasonally by developing high strength/low weight ratio composites for wind blades and by training blade repair technicians who service wind turbines around the Northwest.

I’m proud of the progress we’ve made. Oregon boasts over 3,100 megawatts of operating renewable energy today, enough to power the equivalent of 770,000 homes and avoid over 5.4 million tons of carbon dioxide emissions annually.

We’re reaping economic development opportunities building out a clean energy infrastructure, we are reducing carbon emissions and combating climate change, and we are avoiding pollution from coal-fired power plants.

The reason we can consider the early retirement of the Boardman coal plant is because Oregon has demonstrated the potential for meeting our energy

￼needs from a diverse mix of generation and efficiency. This serves as not only good policy for Oregon, but as a good model for the country.

In fact, between 2003 and 2011, coal’s share of electricity sales in Oregon has fallen by more than 25 percent.

But instead of resting on the breakthroughs, the megawatts and avoided carbon of the last decade of energy in Oregon, we’re partnering in important new ways to go even further in the years ahead.

Because there is still plenty of work to do, and spurring investment in Oregon’s emerging clean energy industries is a key component of my job creation and economic development strategy.

An economy of innovation is within our reach – a low carbon economy – one that leads the way in advanced manufacturing and designing products that use less energy; one that rewards efficiency rather than excess. It’s also an economy that values the local with Oregon companies supplying Oregon companies. Where communities capture their local value streams – their energy savings, wind, sun, forest slash – and drive their economies by preventing those dollars from leaking out into the world economy for imported energy.

We have much work to do to reduce carbon emissions and curb the devastating impact of climate change on the resiliency of our communities and natural resources.

Just like in health care, we need a long-term vision with clear, measurable, achievable goals for how we will fundamentally transform the energy system over time.

First, we need a federal energy policy that will determine how we will collectively transform to a clean energy economy.

Second, we need to create and maintain a predictable market for renewable energy. To date, 29 states have renewable electricity standards, and seven states have renewable energy goals. As the Chair of the Governor’s Wind Energy Coalition, I will be working with my colleague and Vice-Chair,

￼Governor Daugaard (Doo-Guard), and member Governors to protect the state renewable portfolio standards. We also will work with our friends in the US Congress and with the Obama Administration on federal policy that will help create stability within the market.

In addition, we will need to target renewable rich areas and ensure they have access to reliable transmission and balanced cost allocation, and we need to think creatively about new operational techniques to re-optimize and modernize our system.

This will require close collaboration with the Bonneville Power Administration and utilities serving the Pacific Northwest. I am very much looking forward to sitting down with the new administrator, Bill Drummond, to talk about how we can work together to integrate renewable resources onto the grid along with other important energy issues we face in the region today.

We also need sound long-term strategies and partnerships at the state and regional level. After a year and a half of stakeholder engagement, I released a Ten-Year Energy Action Plan for Oregon in December 2012. The ten-year plan outlines three core areas of focus. In order to meet the goals of the ten-year plan, we will need to maintain the state renewable portfolio standard, and align our state’s land use and energy goals to create more certainty and predictability in the siting process.

But Oregon cannot go it alone. That is why last March, along with Washington, California and British Columbia, I signed the West Coast Jobs Action Plan, part of the Pacific Coast Collaborative. Together we have committed to a strategy to create up to 1 million more clean energy jobs over the next decade. It’s an ambitious goal, but the The West Coast Clean Economy Opportunity Study recently estimated that the regional clean economy could triple in size by 2020, to $147 billion.

· First, we need to move forward on policies that will drive investment in clean, home-grown renewable energy and energy efficiency projects.

￼· Second, we must better account for the environmental impacts associated with drilling, mining and burning fossil fuels that are detrimental to the health and well-being of our communities and future generations.

· And Third, we need to protect the taxpayers’ investment in infrastructure by making sure these investments are resilient and account for climate risk. And we must also look at how best to consider and then account for the cost of carbon and our costly reliance on dirty energy sources.

California’s cap and trade system, and British Columbia’s carbon tax, are two examples of tools that help more accurately price energy resources and continue the transition to a 21st century energy infrastructure.

We’ve also called for new, measurable commitments for upgrading state- owned buildings to save taxpayers’ money; innovative financing tools to unlock private capital; and joint fleet purchasing programs to build markets for advanced technology vehicles and regional manufacturing. The public and private sector need to work together to drive investment in research, development, incubation and commercialization to develop the next wave of energy efficient technologies and move them to market. Teaming up with signature research centers, the West Coast can lead the way in the next wave of clean energy development and deployment, creating quality jobs in our region while reducing the strain of utility bills for our businesses and citizens.

So while we may be a relatively small state, I am confident in our ability to be an innovative state. And I am thankful that Oregonians recognize clean energy for the economic engine that it is, rather than the political football some partisans would have it become.

I also believe that Oregonians recognize that to fully emerge from the financial downturn, and to develop a more prosperous future for all our citizens, we must be bold in our vision for our future. We know that there are no quick fixes to these challenges, but having the courage and discipline to look ahead at where we want to be in a decade – with economic

￼opportunity for everyone, with careful stewardship of our natural, human, and financial capital – is the first step to getting there.

So let me conclude where I began with the question: Will we shape our energy future through or will it shape us? As William Jennings Bryan once said: Destiny is not a matter of chance it is a matter of choice; it is not a thing to be waited for, it is a thing to be achieved.

With your help I am confident that our energy future here in the Pacific Northwest and the nation will be a matter of choice, not a matter of chance – and that we will chose a path that leads to a bright, prosperous and low carbon future.